India forms panel to check trade-based money laundering

A committee headed by DG of CEIB has been formed to study modalities of trade based money laundering and device methods to deal with problems


To curb the menace of illicit fund flows, the Indian government has set up a high level panel that will look into trade-based money laundering activities which particularly involve manipulation of invoices.


Director General (DG) of Central Economic Intelligence Bureau (CEIB) will be convener of the committee, which was step up recently to suggest steps to check trade-based money laundering activities.


"A committee has been formed to study modalities of this (trade based) money laundering and device methods to deal with problems on how it happens and develop models and ways of dealing with it," an official said.


This is part of the government's efforts to clamp down on black money generation by Indian entities both within and outside the country.


The committee consists of DG CEIB, DG Directorate of Revenue Intelligence (DRI), Enforcement Directorate, Director Financial Intelligence Unit (FIU) and CBDT investigation wing.


The official said the committee will develop and crystallise indicators - on what kind of transactions - study and identify red flags if something is wrong.


Besides, it is entrusted with flow of meaningful information among agencies, filtering the information and passing it on to relevant organisation, the official added.


Trade-based money laundering is over or under invoicing based on whether some entities want to take money from India abroad or bring illegal money from outside and make it legal.


Secondly, it also involves activity such as money remittances made abroad through banks channels but when the import never materialises.


With liberalisation and expansion of economy, unscrupulous elements have also changed the method of tax evasion and avoidance.


"The world is also now obliterating the distinction between avoidance and evasion," Finance Minister Arun Jaitley said at the inauguration of the 2nd Regional Customs Enforcement Meeting.


"We have entered the world of free trade and the essential pre-requisite of any free trade is fair trade but then when fairness ceases to happen, it is such institution (DRI) (that) step in. There are various reasons why fairness ceases to happen," he added.


SEBI's restrictions on UP Hotels to continue

SEBI said its curbs will remain on UP Hotels as the company has not complied with the minimum public shareholding requirements till date


Market regulator Securities and Exchange Board of India (SEBI) has confirmed the restrictions it had imposed on UP Hotels Ltd and the company promoters for not meeting the minimum 25% public shareholding requirements.


The curbs will remain on the company as it “has not complied with the minimum public shareholding requirements till date’’.


Consequently, the market regulator’s order dated 3rd December said “it becomes necessary for SEBI to confirm the directions issued vide the interim order against the company, its directors and promoters/promoter group.”


“... hereby confirm the directions issued vide interim order dated June 4, 2013 against the company, UP Hotels Ltd, its directors, promoters/ promoter group,” SEBI said.


“This order shall remain in force till further directions,” it added.


The market regulator, in June last year, had slapped various restrictions on over 100 firms, including UP Hotels, and their respective promoters and directors for not achieving the 25% public holding within the June 3 deadline.


The capital market regulator had frozen the voting rights and corporate benefits of promoters and directors of these companies and barred them from holding any new position on the boards of listed firms, among others.


Among others, UP Hotels and the joint managing directors, in their submissions to SEBI, had argued that they were not able to comply with the norms due to the restraint order dated 7 December 2012 and status quo order dated 20 March 2013 passed by a civil court.


However, SEBI noted that “prior to the orders of civil court also, the company had sufficient time to comply with the minimum public shareholding norms’’.


India's GDP growth rate to overtake China's between 2016 and 2018: Goldman Sachs

Goldman Sachs also said that it expects crude oil to climb up to $85 in 2015, while giving a positive outlook to India's prospects


The Indian economy will grow at 6.3% in 2015, said Tushar Poddar, India economist, Goldman Sachs. He expects India to become the fastest growing emerging market over 2016-18, overtaking China.


Poddar believes that balance sheets of the corporate sector and banks were a concern, but risks had peaked and would come down as macros improve.


Goldman Sachs expects crude oil to climb to $85 in 2015. Poddar said that GDP in the external environment will remain benign, and India's GDP should grow at 6.5% in FY16 and 7% in FY17.


Goldman Sachs feels that improvement in governance and micro-conditions – especially, the cost of doing business, rapid urbanisation and higher capital spending could lead to higher growth rates in the Indian economy.


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